Bertelsmann Stiftung (ed.) Responsible Entrepreneurship Business and Society: Bridging the Gap Responsible Entrepreneurship Bertelsmann Stiftung (ed.) Responsible Entrepreneurship Business and Society: Bridging the Gap Reinhard Mohn Prize 2016 Bibliographic informa on published by the Deutsche Na onalbibliothek The Deutsche Na onalbibliothek lists this publica on in the Deutsche Na onalbibliografi e; detailed bibliographic data is available on the Internet at h p://dnb.dnb.de. © 2016 Verlag Bertelsmann Stiftung, Gütersloh Responsible: Birgit Riess, Julia Scheerer Copy editor: Barbara Serfozo, Berlin Production editor: Christiane Raffel Cover design: Elisabeth Menke Cover illustration: Katrin Biller, k.zwo, Bielefeld; 4zevar / Shutterstock; vgajic / iStockphoto.com; Roberto Westbrook / Spaces Images RF / Strandperle Typesetting and Printing: Hans Kock Buch- und Offsetdruck GmbH, Bielefeld ISBN 978-3-86793-745-0 (print) ISBN 978-3-86793-754-2 (e-book PDF) ISBN 978-3-86793-755-9 (e-book EPUB) www.bertelsmann-stiftung.org/publications Contents Contents Foreword . 9 Liz Mohn Responsible Entrepreurship in Our Time . 11 Birgit Riess “Learning from the World”: Research on International Examples of Good Practice . 17 Andreas Heimer, Claudia Münch, Lea Eggers Part 1: Business as a Sociopoli cal Agent of Change – Examining Responsible Entrepreneurship . 23 Public Value – the Contribution of Organizations and Companies to the Common Good . 25 Timo Meynhardt Rethinking Innovation – the Opportunity and Challenge of “Social Innovation” for Companies . 36 Jürgen Howaldt Markets for the Good of All – How Businesses and Social Causes Are Converging . 46 Felix Oldenburg Case Studies: Strengthening Intercultural Understanding – the Intercultural Innovation Award (BMW and United Nations Alliance of Civilizations) . 53 5 Contents The “Bank for People Without a Bank” – Promoting Social Inclusion (Zweite Sparkasse) . 57 HP Helps Small Businesses Grow . 61 Turning a Perceived Disadvantage into a Competitive Advantage (Specialisterne) . 64 Part 2: Scaling and Impact – Responding to Complexity with Collec ve Ac on . 69 Scaling Social Impact . 71 Christiana Weber A Reference Model for Entrepreneurial Responsibility with Impact – Criteria and Indicators . 79 Julia Scheerer, Jakob Kunzlmann Case Studies: Tackling Youth Unemployment Together – Nestlé’s Youth Employment Initiative . 88 Competing Chemical Companies Working toward a Cleaner Future – Together for Sustainability . 93 Supporting Social Startups – Social Impact Start . 97 Business in the Community – a Corporate Network for Responsible Entrepreneurship . 101 Changing Production Methods in the Textile Industry – the Sustainable Apparel Coalition . 106 Part 3: Governance and Regula on – How Poli cs Can Promote Compliance . 111 Social Compliance: Standards and Management . 113 Josef Wieland, Isabel Jandeisek Understanding Corporate Responsibility in Different Varieties of Capitalism . 122 Gregory Jackson, Julia Bartosch Case Studies: Succesful Cooperative Regional Development – the ZMRN Initiative . 131 6 Contents Battling Discrimination and Promoting Workforce Diversity – the Charte de la diversité . 135 Business as a Force of Good in the World – B Corp and Benefi t Corporations . 139 Responsible Entrepreneurship – Recommendations for Companies and Policymakers . 143 Birgit Riess, Julia Scheerer, Jakob Kunzlmann The Authors . 151 Interview Partners . 156 7 Foreword Most people, if asked how they envision the world of the future, would be likely to respond with profound uncertainty. This is clearly in part due to the crises we face today, but is also a function of the rapid pace and complex nature of the technological, economic and societal changes currently underway, which together are creating a world increasingly marked by tran- sition, fl exibility and mobility. This leaves many feeling overwhelmed and unable to keep pace. Many people respond to these upheavals with a sense of anxiety about the future. However, these emotional responses often cloud both the creativity needed to develop innovative solu- tions and the clarity of thought required to identify new opportunities. How might we create a future marked by innovation and social inclusion, thereby fostering employment and well- being in a globalized world? The belief advanced by my husband, Reinhard Mohn, that “we need to get more people thinking,” holds more true than ever. Getting more people to think requires a culture of responsibility if we are to unleash motivation and creativity. Above all, we need more reasoned, dispassionate dialogue between stakeholders that brings everyone on board to target the same goal. Facing the challenges ahead will require the combined strength of all sectors of society. Actors in government, the private sector and civil society are called upon to work together in demonstrating their responsibility to society by showing the way forward. Together, we must aim to bring as many people as possible on board by helping them assume greater responsibili ty for determining the course of their own lives. Targeting social innovation in this way requires sharing the same ethic, seeking to pre- serve an open, democratic and fair society underpinned by the values of freedom, solidarity and compassion. Responsible entrepreneurship can and should have a positive impact on fostering advances in society. Aiming to help drive the debate forward, this year’s Reinhard Mohn Prize stands as a reminder of the fact that even in a context of global competition among entrepreneurs and businesses, Reinhard Mohn’s faith in the strength of compassion (“Menschlichkeit gewinnt!”) serves us all as a leitmotif. Liz Mohn Vice-Chair of the Executive Board, Bertelsmann Stiftung 9 Responsible Entrepreneurship in Our Time Birgit Riess Responsible Entrepreneurship in Our Time Our society fi nds itself confronted with a broader array of challenges than ever before. Globali- zation may have brought prosperity, but it has also brought new problems. Digitization already heavily infl uences the way we make money, consume and our very way of life. However, it is simply too soon to predict the extent to which these changes will have a negative or positive impact on our society. Similarly, it is far from certain how we will deal with the consequences of demographic changes that will pervade every aspect of society. We know that the effects of demographic change will fundamentally alter the labor market, but how we manage migra- tion and integration has cast a spotlight on unresolved problems. These challenges elude easy solutions. Highly complex by nature, they are interdependent. Appropriate and effective responses to this complexity and efforts to introduce future-oriented change often fail at the national level, fi nding more success in an international context. Along- side these developments, there is a growing awareness that securing the sustainability of our economic, social and environmental systems will require contributions from all societal actors – in other words, joint efforts from politics, business and civil society. While political action is essential here, there are additional, meaningful ways in which we can support it. The Reinhard Mohn Prize 2016 takes as its subject the world of private business and ex- plores the question of how companies can make a meaningful contribution to sustainable so- cietal development – by demonstrating responsible management and proactively contributing to their social environment. This year’s Reinhard Mohn Prize draws on its namesake’s convic- tion that “companies have a contribution to make to society” and that entrepreneurs “do not have the right to stand completely apart from society” (Mohn 2004: 141). Many companies commit to contributing to the societies in which they operate. The Insti- tute for Economic Research estimates that the volume of domestic entrepreneurial engage- ment represents a fi nancial equivalent of at least € 11 billion a year (Hüther et al. 2012). But this raises two questions: What are the standards of responsible activity for companies under conditions of shifting global megatrends? And how effective is social engagement, anyway, in terms of both scale and reach? Underpinning these considerations is the understanding that responsibility does not equal charity. Companies have a decisive role to play in strengthening social fabrics and innovation in society. Companies infl uence the lives and environment of 11 Responsible Entrepreneurship in Our Time people in our society in diverse ways with their products and services, as well as their manu- facturing and supply methods. They therefore bear responsibility – not just economically – but also in the social and environmental impact of their activity. Entrepreneurial engagement also bears an enormous social potential: the ability to solve social problems with entrepreneurial means. This is rooted in the fundamental principles of enterprise: innovation, risk-taking and resource allocation. And these principles can form an effective complement to conventional state or civil society mechanisms targeting solutions – ideally in joint initiatives. Clearly, this kind of activity also lies in the interests of companies themselves. This is because companies and society exist in complex interrelation with each other – and in a state of mutual dependence. This publication therefore examines the role of companies as social innovators in light of the dramatic shift in expectations placed upon them. Shi ing expecta ons... In recent decades, the debate